EXHIBIT 10.5
CHAMPION INTERNATIONAL CORPORATION
----------------------------------
NONQUALIFIED SUPPLEMENTAL SAVINGS PLAN
--------------------------------------
(as amended and restated effective as of March 1, 1996)
INTRODUCTION
------------
Champion International Corporation hereby amends and restates the Champion
International Corporation Nonqualified Supplemental Savings Plan, effective as
of March 1, 1996. The Plan was originally adopted effective as of August 1,
1994. This Plan is an unfunded deferred compensation arrangement maintained by
Champion International Corporation for the purpose of providing supplemental
retirement savings primarily for a select group of management or highly
compensated employees.
ARTICLE I - DEFINITIONS
-----------------------
1.1 "Beneficiary" means the person or persons entitled to receive the
-----------
distributions, if any, payable under the Plan upon or after a Participant's
death. Each Participant may designate a Beneficiary by filing the proper form
with the Committee. A Participant may designate one or more contingent
Beneficiaries to receive any distributions after the death of a prior
Beneficiary. A designation shall be effective upon said filing, provided that
it is so filed during such Participant's lifetime, and may be changed from time
to time by the Participant.
1.2 "Code" means the Internal Revenue Code of 1986, as amended from time to
----
time, and regulations relating thereto.
1.3 "Code Section 401(a)(17) Limitation" means the applicable compensation
----------------------------------
limitation set forth in section 401(a)(17) of the Code (as adjusted as provided
therein) (or any corresponding successor provision).
1.4 "Committee" means the Champion International Corporation Pension and
---------
Employee Benefits Committee (or its delegate(s)) which is responsible for the
administration of this Plan in accordance with the provisions of the Plan as set
forth in this document.
1.5 "Company" means Champion International Corporation, a New York corporation,
-------
or any successor thereto, including any successor to substantially all of its
assets which adopts and assumes the Plan at the time of transfer.
1.6 "Compensation" means with respect to any Plan Year, the total of base
------------
pay, cash bonuses, foreign service premium, and temporary disability earnings
paid to an Executive by an Employer or which would otherwise be so paid but for
a deferral election under this Plan, the Savings Plan,
and/or a plan subject to section 125 of the Code. "Compensation" shall also
include any deferred bonuses under any management incentive bonus program(s),
any "basic" 12 week interim pay under the Employer's "Special Termination
Benefits" policies for employees, and any payments under the "Sustained
Performance Incentive Program" if maintained by the Employer.
1.7 "Deferral Election" means the form described in Section 2.2 of the Plan.
-----------------
1.8 "Deferred Compensation Account" means the account to be established by
-----------------------------
the Company as a book reserve to reflect the amounts deferred by a Participant
and the matching contributions by the Employer under Article II, as adjusted by
earnings (or losses) under Article III.
1.9 "Effective Date" means March 1, 1996.
--------------
1.10 "Employer" means the Company and any affiliate of the Company which,
--------
with the authorization of the Company, has adopted the Plan, and any successor
or assignee of any of them.
1.11 "Excess Compensation" means that portion of an Executive's Compensation
-------------------
which is in excess of the Code Section 401(a)(17) Limitation.
1.12 "Executive" means any employee of an Employer who is: (a) classified
---------
as Grade 20 to 34 by the Employer (except for any employee classified as Grade
31 or 33 but not administered as Grade 20 to 34) and whose Savings Plan Earnings
in any Plan Year exceed the applicable Code Section 401(a)(17) Limitation; (b)
classified as Grade 20 or higher and designated by the Committee as a member of
the select group of management or highly compensated employees eligible for
participation in the Plan; (c) a Vice President; (d) a Listed Executive; (e) and
any other employee designated by the Committee as a member of the select group
of management or highly compensated employees eligible for participation in the
Plan.
1.13 "Listed Executive" means any employee of an Employer whose name appears on
----------------
the list attached hereto as Schedule A.
1.14 "Management Incentive Award" means any bonus awarded under the Champion
-------------------------- --------
International Corporation Management Incentive Program or under any other
- ------------------------------------------------------
management incentive program maintained by an Employer that may be designated by
the Committee as deferrable under Section 2.2(b) of the Plan.
1.15 "Participant" means any Executive who elects to participate in the Plan
-----------
in accordance with Article II or a person who was such at the time of his death
or termination of service and who retains, or whose Beneficiary retains, a
benefit under the Plan which has not been distributed.
1.16 "Plan" means the Champion International Corporation Nonqualified
---- -----------------------------------------------
Supplemental Savings Plan as set forth in this instrument, and as it may be
- -------------------------
amended thereafter.
1.17 "Plan Year" means the calendar year.
---------
1.18 "Savings Plan" means the Champion International Corporation Savings Plan
------------ -----------------------------------------------
#077 as in effect on the Effective Date and as subsequently amended, and any
- ----
successor or replacement plan for such plan.
1.19 "Savings Plan Earnings" means "Earnings" as defined in the Savings Plan
---------------------
without giving effect to the $200,000 limitation expressed therein and without
otherwise giving effect to the Code Section 401(a)(17) Limitation.
ARTICLE II - DEFERRAL ELECTIONS AND
------------------------------------
EMPLOYER MATCHING CONTRIBUTIONS
-------------------------------
2.1 General. Each Executive may elect in accordance with this Article II
-------
to defer a part of his Excess Compensation and/or a part (or all) of any
Management Incentive Award earned for a Plan Year and thereby become a
Participant under the Plan.
2.2 Deferral Election. A Participant desiring to exercise an election under
-----------------
Section 2.1 shall file with the Employer a Deferral Election in accordance with
(a) and/or (b) below, as applicable, in such form as the Committee may
prescribe. Such election shall be irrevocable, provided however, in the event a
Participant is faced with an unforeseeable emergency (as defined in Section 4.3)
during the Plan Year, such Participant, with the approval of the Committee, may
revoke his election for the remainder of such Plan Year.
(a) Deferral of Excess Compensation. A Deferral Election of a Participant
-------------------------------
who is not a Listed Executive may authorize the Employer to defer a percentage
of his Excess Compensation and provide that his Excess Compensation be reduced
by a whole percentage of not less than one percent (1%) nor more than eight
percent (8%) (sixteen percent (16%) effective January 1, 1997), as determined by
the Participant. Notwithstanding the foregoing, an Executive's Deferral
Elections under this Section 2.2(a) for the short 1994 Plan Year and/or for any
of the Plan Years 1995 through 1997 may specify deferral amounts in excess of 8%
(sixteen percent (16%) effective January 1, 1997), of his Excess Compensation
for said Plan Years so that such Executives who were elected officers on August
1, 1994 may defer during said Plan Years amounts that they could have deferred
if the Plan had been in effect for calendar years 1989 through 1993 and the
entire year of 1994 (whether or not they were elected officers during any or all
calendar years 1989 through 1993 or the portion of 1994 prior to August 1,
1994), or so that such Executives who are not elected officers on August 1, 1994
may defer during said Plan Years amounts that they could have deferred if the
Plan had been in effect for the 1993 calendar year and the entire year of 1994.
(b) Deferral of Management Incentive Awards. A Deferral Election of a
---------------------------------------
Participant may authorize the Employer to defer all or any part of any
Management Incentive Award and
provide that the Management Incentive Award be reduced by the amount of such
deferral. A Participant who elects to defer any part of a Management Incentive
Award shall be required, with respect to the Plan Year in which the Management
Incentive Award would otherwise be paid, to make before-tax contributions to the
Savings Plan in an amount equal to the maximum before-tax contribution permitted
under the Savings Plan. A violation of the Savings Plan contribution requirement
of the preceding sentence shall not be deemed to have occurred if the
Participant elects to make such required contribution under the Savings Plan,
but the amount the Participant may contribute to the Savings Plan is reduced (or
there is a refund from the Savings Plan) by reason of the actual deferral
percentage test of section 401(k) (3) of the Code, by reason of section 415 of
the Code, or by reason of any other provision of law that limits the amount that
a Participant is permitted to contribute to the Savings Plan.
2.3 Time of Election. A Participant's Deferral Election must be delivered to
----------------
the Employer by such date as the Committee shall specify, which date shall be
prior to the beginning of the Plan Year in which the Excess Compensation and/or
Management Incentive Award subject to such election are earned.
Notwithstanding the foregoing, for the 1996 Plan Year only, a Participant may
deliver to the Employer a Deferral Election that provides for the deferral of
the Participant's 1996 Management Incentive Award (which would be paid in 1997)
on or before March 31, 1996. With respect to an employee of an Employer who
becomes an Executive during a Plan Year and who wishes to make a deferral
election under this Article II for such Plan Year, he must deliver his Deferral
Election to the Employer within the 30-day period following the day he becomes
an Executive but only with respect to Compensation earned after the date such
Compensation Deferral Election is delivered to the Employer.
2.4 Commencement of Deferrals. A Deferral Election shall be effective for the
-------------------------
entire Plan Year to which it relates but only with respect to Compensation of
the Participant earned for services rendered after the election is made in
accordance with Sections 2.2 and 2.3. The deferral of Excess Compensation
pursuant to such election shall not commence until the pay period following the
pay period in which the Participant's aggregate Compensation paid to date for
such Plan Year actually exceeds the Code Section 401(a)(17) Limitation then in
effect. The deferral of a Management Incentive Award shall occur when the
Management Incentive Award would otherwise be paid to the Participant.
2.5 Crediting of Accounts. Compensation otherwise payable to the Participant
---------------------
during the applicable Plan Year but deferred in accordance with Section 2.2
shall be credited to the Participant's Deferred Compensation Account as soon as
administratively feasible after his Compensation is so reduced.
2.6 Matching Contributions. Each Employer shall credit matching contributions
----------------------
to the Deferred Compensation Account of each Participant who has a Deferral
Election under Section 2.2(a) with respect to his Excess Compensation in effect
for all or part of the Plan Year. The amount of such matching contributions
shall be calculated by reference to the Participant's Excess Compensation
deferrals for the Plan Year and shall be equal to fifty percent (50%) of the
amount of the first six percent (6%) of Excess Compensation deferred.
Notwithstanding the
foregoing, with respect to Executives who for the short 1994 Plan Year and/or
any of the Plan Years 1995 through 1997 make deferral elections with respect to
Excess Compensation in excess of 8% (sixteen percent (16%) effective January 1,
1997) as permitted under Section 2.2(a), matching contributions with respect to
such excess deferrals shall be equal to fifty percent (50%) of the amount of the
first six percent (6%) of aggregate Excess Compensation deferred for the years
to which such excess deferrals relate as provided in the second sentence of
Section 2.2(a). Matching contributions under this Section 2.6 shall be credited
to Participants' Deferred Compensation Accounts on the same periodic basis as
matching contributions are credited to participants' accounts under the Savings
Plan.
ARTICLE III - CREDITING OF EARNINGS
-----------------------------------
3.1 General. Subject to Section 3.4, there shall be credited to
-------
Participants' Deferred Compensation Accounts earnings (or losses) as if such
Deferred Compensation Accounts were actually invested in the investment funds
and Company Stock Fund available under the Savings Plan as determined under this
Article III.
3.2 Investment of Participant Deferrals. With respect to that part of each
-----------------------------------
Participant's Deferred Compensation Account attributable to his elective
deferrals under Section 2.2, each Participant shall elect to have earnings (or
losses) credited to his Deferred Compensation Account from among the investment
funds made available under the Savings Plan with respect to participant before-
tax elective deferrals under said plan. Such an election shall be made in
writing, on a form provided by the Committee, and delivered to the Employer
prior to the beginning of each Plan Year by such date as the Committee shall
determine. An investment election shall be effective for the entire Plan Year
to which it relates unless modified by the Participant during the Plan Year.
Such modifications may be made periodically on the same basis as participant
investment elections under the Savings Plan may be modified. If a Participant
fails to make and deliver an election for the following Plan Year by the date as
determined by the Committee, then his Deferred Compensation Account shall be
credited with the earnings (losses) under the investment election most recently
in effect.
3.3 Investment of Employer Matching Contributions. With respect to that part
---------------------------------------------
of each Participant's Deferred Compensation Account attributable to Employer
matching contributions under Section 2.6, the Company shall credit each
Participant's Deferred Compensation Account with earnings (or losses) as if such
matching contributions were invested in the "Company Stock Fund" under the
Savings Plan.
3.4 Crediting of Earnings. The rates of return throughout each Plan Year for
---------------------
the investment funds and Company Stock Fund referenced under Sections 3.2 and
3.3 shall be the same as the actual rates of return for said funds as under the
Savings Plan. For each Plan Year, each Participant's Deferred Compensation
Account shall be increased or decreased as if it had earned such rates of
return. Such increase or decrease shall be based on the varying balances of the
Deferred Compensation Accounts throughout the Plan Year and shall be credited to
said
accounts on the same periodic basis as investment earnings (losses) are credited
to participants' accounts under the Savings Plan.
ARTICLE IV - PLAN BENEFITS
--------------------------
4.1 Vesting. Subject to Section 8.1, a Participant's rights to that part of
-------
his Deferred Compensation Account attributable to his elective deferrals under
Section 2.2, as adjusted for earnings (or losses) under Article III, shall be
nonforfeitable at all times. A Participant's rights to that part of his
Deferred Compensation Account attributable to the crediting of Employer matching
contributions under Section 2.6, as adjusted for earnings (or losses) under
Article III, shall become nonforfeitable on the same basis as Employer matching
contributions under the Savings Plan.
4.2 Distributions. Subject to Section 4.3, the nonforfeitable amounts
-------------
represented by a Participant's Deferred Compensation Account shall become
distributable upon the Participant's separation from service with all Employers
due to his retirement, death, disability (in accordance with the definition of
"Disability" under the Savings Plan), or other termination of employment. At
the time a Participant makes his yearly Deferral Election under Article II of
the Plan, he also shall elect whether the nonforfeitable amounts represented by
his Deferred Compensation Account shall commence to be paid to him as soon as
administratively feasible upon his separation from service with all Employers or
as of a later date specified by the Participant. Such an election also shall
specify whether such amounts shall be paid in a single sum cash distribution, or
in up to ten (10) annual cash installments (as well as the amounts of such
installments) payable to the Participant while living with any remaining
nonforfeitable amount in his Deferred Compensation Account payable after his
death to his Beneficiary in a single sum in accordance with Article V.
4.3 Withdrawal for Unforeseeable Emergency. Notwithstanding the provisions of
--------------------------------------
Section 4.2 to the contrary, in the event that a Participant is faced with an
unforeseeable emergency (as defined below), the Participant may request a
withdrawal from the nonforfeitable portion of his Deferred Compensation Account
in an amount sufficient to meet such emergency. Any such withdrawal shall be
paid in a single sum distribution. For purposes of this Section 4.3, an
unforeseeable emergency is a severe financial hardship to the Participant
resulting from a sudden and unexpected illness or accident of the Participant or
of a dependent (as defined in section 152(a) of the Code) of the Participant,
loss of the Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant. The Committee shall determine whether
the circumstances presented by the Participant constitute an unforeseeable
emergency. Such circumstances and the Committee's determination will depend
upon the facts of each case, but, in any case, payment may not be made to the
extent that such hardship is or may be relieved: (a) through reimbursement or
compensation by insurance or otherwise, (b) by liquidation of the Participant's
assets, to the extent the liquidation of such assets would not itself cause
severe financial hardship, or (c) by cessation of his elective deferrals under
this Plan.
4.4 Commencement of Payment. At the time for payment designated by the
-----------------------
Participant in accordance with Section 4.2, the nonforfeitable amounts
represented by the Participant's Deferred Compensation Account, increased by any
nonforfeitable amounts due to be credited but not yet credited under Sections
2.5 and 2.6, and decreased by any withdrawals under Section 4.3, shall commence
to be paid in a single sum distribution or in installments as elected by the
Participant in accordance with Section 4.2. If installment payments are
elected, the first annual installment shall be payable as of the commencement
date elected by the Participant under Section 4.2 and the remaining installments
shall be payable on the annual anniversary of that commencement date. The
installment payments shall be in such amounts as elected by the Participant on
his most recent yearly election form completed prior to his separation from
service or other termination of employment. If a Participant's Deferred
Compensation Account is paid in installments, such account shall continue to be
credited with earnings (or losses) under Article III until payment of the final
installment.
ARTICLE V - DEATH BENEFIT
-------------------------
5.1 Terms. Upon the death of a Participant, any unpaid nonforfeitable amounts
-----
represented by the Participant's Deferred Compensation Account, increased by any
amounts due to be credited but not yet credited under Sections 2.5 and 2.6,
shall be payable to the Participant's Beneficiary in a single sum distribution
as soon as administratively feasible after the Participant's death.
ARTICLE VI - ADMINISTRATION OF PLAN
-----------------------------------
6.1 General Administration. The Committee shall be responsible for the general
----------------------
administration of the Plan and for carrying out its provisions. The Committee
shall have full power and authority to interpret, construe and administer the
Plan.
6.2 General Powers. All provisions set forth in the Savings Plan with respect
--------------
to the administrative powers and duties of the Committee and the procedures for
filing claims shall also be applicable with respect to the Plan. The Committee
shall be entitled to rely conclusively upon all calculations, certificates,
opinions and reports furnished by any actuary, accountant, controller, counsel
or other person employed or engaged by the Committee with respect to the Plan.
ARTICLE VII - AMENDMENT OR TERMINATION
--------------------------------------
7.1 Amendment or Termination. The Plan may be amended in whole or in part from
------------------------
time to time, or terminated, by action of the Committee. Such termination and
any such amendment shall be binding on each Employer, Executive and Beneficiary.
Notice of such termination or
amendment shall be given in writing to each Employer, Participant and
Beneficiary of a deceased Participant.
7.2 Effect of Amendment or Termination. No amendment or termination of the
----------------------------------
Plan shall directly or indirectly deprive any current or former Participant or
Beneficiary of all or any portion of any benefit under this Plan, payment of
which has not been made prior to the effective date of such amendment or
termination.
ARTICLE VIII - GENERAL PROVISIONS
---------------------------------
8.1 No Funding or Interest in Assets. The Plan shall at all times be entirely
--------------------------------
unfunded and no provision shall at any time be made with respect to segregating
any assets of an Employer for payment of any benefits hereunder. No Participant
or his designated Beneficiary shall acquire any property interest in his
Deferred Compensation Account or any other assets of the Employer, their rights
being limited to receiving from the Employer deferred payments as set forth in
this Plan and these rights are conditioned upon continued compliance with the
terms and conditions of this Plan. To the extent that any Participant or
Beneficiary acquires a right to receive benefits under this Plan, such right
shall be no greater than the right of any unsecured general creditor of the
Employer.
8.2 Assignment or Alienation. Except as required by law, no right of a
------------------------
Participant or designated Beneficiary to receive payments under this Plan shall
be subject to transfer, anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge, or hypothecation or to execution, attachment, levy
or similar process or assignment by operation of law and any attempt, voluntary
or involuntary, to effect any such action shall be null and void and of no
effect.
8.3 General Conditions. Any retirement benefit or any other benefit payable
------------------
under the Savings Plan shall be paid solely in accordance with the terms and
conditions of the Savings Plan and nothing in this Plan shall operate or be
construed in any way to modify, amend or affect the terms and provisions of the
Savings Plan.
8.4 No Guaranty of Benefits. Nothing contained in the Plan shall constitute a
-----------------------
guaranty by any person that the assets of an Employer will be sufficient to pay
any benefit hereunder.
8.5 No Enlargement of Rights. No Participant or Beneficiary shall have any
------------------------
right to a benefit under the Plan except in accordance with the terms of the
Plan. Establishment of the Plan shall not be construed to give any Participant
the right to be retained in the service of an Employer.
8.6 Construction. This Plan shall be construed under the laws of the State of
------------
Connecticut. Article headings are for convenience only and shall not be
considered as part of the terms and provisions of the Plan. Words in the
masculine gender shall include the feminine, and the singular shall include the
plural, and vice versa, unless qualified by the context.
8.7 Withholding of Taxes. The Company shall withhold from any amounts payable
--------------------
under the Plan, all federal, state, and local taxes that the Company determines
is legally required.
8.8 Binding on Successors, Purchasers, Transferees and Assignees. The Plan
------------------------------------------------------------
shall be binding upon any successor or successors of the Company and of any
other Employer whether by merger, consolidation, or otherwise. In the event of
the sale or transfer of substantially all of the assets of the Company or of any
other Employer to any successor, purchaser, transferee or assignee, the Company
and such other Employer each agrees that as a condition of such sale or
transfer, the successor, purchaser, transferee or assignee shall adopt and
assume the Plan at the time of the sale, transfer or assignment including,
without limitation, all obligations which have accrued or may accrue in the
future, and shall be bound by all the terms and provisions of the Plan, and the
Company and such other Employer shall remain fully liable under the Plan. If
the Company or any other Employer assigns or otherwise transfers or attempts to
delegate its duties or responsibilities pursuant to the Plan to any party, the
Company and such other Employer each agrees that it shall remain obligated
hereunder in addition to the obligation hereunder of such party. If a merger,
consolidation, sale, or transfer is made as provided in this Section, the
provisions of this Section shall continue in full force and effect, and
thereafter for all purposes of this Section and the application thereof, the
immediate successor, purchaser, transferee or assignee and all subsequent
successors, purchasers, transferees and assignees shall be deemed to be and
shall be considered as the Company or as any other Employer hereunder, as the
case may be. No other such merger, consolidation, sale, or transfer shall be
made except in compliance with the provisions of this Section.
IN WITNESS WHEREOF, the undersigned, as duly authorized by the Pension and
Employee Benefits Committee of Champion International Corporation, on behalf of
said Committee, has executed this amendment and restatement of the Plan as
evidence of its adoption effective as of March 1, 1996.
January 31, 1997 /s/ William C. Foster
--------------------------------------------
William C. Foster
Senior Associate Counsel-Human Resources
SCHEDULE A
----------
CHAMPION INTERNATIONAL CORPORATION
NONQUALIFIED SUPPLEMENT SAVINGS PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF MARCH 1, 1996)
-------------------------------------------------------
Listed Executives
-----------------
Name SSN
---- ---
Carraway, James W. ###-##-####
Danielsson, Lars G. ###-##-####
Green, Charles E. ###-##-####
Green, Mary E. ###-##-####
MacBrayne III, John M. ###-##-####
O'Brien, Edward D. ###-##-####
Steltenkamp, Michael S. ###-##-####
Suh, Samuel ###-##-####
Van Horn, James L. ###-##-####